We turn our attention to the Constitution State this week as we look at Connecticut’s state-run retirement program. Here are the previous posts in this series: Maryland, New Jersey, Washington, California, Illinois, Massachusetts, and an overview of state-run retirement programs.
Public Act No, 16-29 was signed into law by Connecticut Governor Dannel Malloy on May 27, 2016, and established the Connecticut Retirement Security Exchange. The Connecticut Retirement Security Board was created to oversee the exchange and is made up by 15 members. The plan will be implemented on January 1, 2017, and fully operational by 2018.
The Connecticut Retirement Security Exchange will provide a retirement plan for about 600,000 residents. The new law mandates that employers with at least five employees to enroll in the exchange if they do not already offer a retirement program, and employees must be enrolled within 120 days of the implementation of the program with new employees enrolled within 120 days of hire.
Employees may voluntarily participate and will be able to select from several providers. The default rate will be 3% and employees will be able to change their contribution by either decreasing or increasing the amount. Employers are not required to contribute to employee plans, but if they do not remit contributions appropriately they are subject to wage-theft laws.
The Connecticut Retirement Security Exchange will be self-sufficient and the Connecticut Retirement Security Authority will manage the funds through a private-sector IRA provider to manage the funds.